Cuban Soft Drink Can Factories, Another Victim of Reforms
The Las Lomas factory manufactured 184,000 boxes out of the 4.5 million planned for 2021, and a similar situation is expected this year.
HAVANA TIMES – Since the beginning of January, the official press has reported the lack of cans and containers for soft drinks in Los Portales, the main company on the island, associated with Nestlé. The factory, which renovated its machinery in 2018 after a Swiss investment, went from 278 million units that year to only 86 million in 2021. But it isn’t the only one going through a disastrous moment. Las Lomas manufactured 184,000 boxes out of the 4,500,000 planned for 2021, and a similar situation is expected this year.
Edelvy Valdivia Gonz, deputy director of the company, spoke with Cubadebate, which just two weeks ago reviewed the bad data of Los Portales, released in January, to warn that what 2022 presented is unchanged. This Thursday he addressed Las Lomas, which produces Fiesta and Dely soft drinks and which, together with Los Portales and Ember, is one of the three main suppliers of packaging on the island.
The lack of liquidity and the high costs of importing cans are among the causes cited by the staff member to justify the debacle. “The intensification of the blockade, the contraction of markets, the shortage of aluminum and the increase in its price on the international market have made it impossible to have the necessary foreign exchange to increase the levels of production that had been planned,” says Valdivia.
Although, following the official speech, he puts US sanctions and the pandemic in the lead, with the disappearance of tourism as a result, the official doesn’t deprive himself of pointing out the January 2021 economic reforms as one of the greatest, purely national, distortions that strangle the island. The process caused “a marked increase in costs, since soft drink production has a high percentage of imported inputs and its prices multiplied by 24,” he says.
Valdivia Gonz finds more internal reasons to blame: the interruption of payment mechanisms backed by liquidity. The measure, which was part of a resolution of the Ministry of Economy, was intended to give guarantees of payment to companies, but the lack of solvency led to its suspension.
“Although the company started almost from scratch, it managed to start producing and selling a few products in the best markets and to get paid with the support of a liquidity charter to start maintaining a production cycle. But then, from the lack of liquidity due to the crisis and the pandemic, it was interrupted.”
Las Lomas produces only canned soft drinks, whose outlook at the international level is already bad due to the high price of aluminum. “On the other hand, shipping companies, due to the blockade, limit themselves to disembarking through Cuban ports, which forces us to hire several to import the raw materials. Added to this is the limitation of the acquisition of spare parts for scheduled maintenance and breaks that have occurred,” he continues.
The company has tried, says the manager, to expand its market through (hard currency) online sales, which provides it with the necessary foreign exchange to continue buying raw materials. In addition, it has begun to sell carbonated soft drinks in bulk in Cuban pesos, a product that, according to Valdivia Gonz, has been well accepted.
Las Lomas is looking for more solutions, such as the acquisition of a filling line of dispensed soft drinks or productions in other systems, such as plastic bags.
However, bulk soda lends itself more to adulteration, a manipulation that diminishes its quality and often provokes rejection by consumers. Stored in tankers or in the so-called thermoses that also move on vehicles, this type of dispensed drink has traditionally been the preferred target for irregularities.
Hygiene is another of the weak points of bulk sales. Customers often complain about the lack of cleaning of the tanks, the handling without taking into account hygienic standards with the consequent gastrointestinal problems. This form of sale also forces the buyer to carry his own container so it works in neighborhoods or around homes but less so in recreational places where many don’t carry a thermos or glass of their own.
Nothing works in that island and the regime still “functioning” through repression, meanwhile the city is literally is crumbling. #weareAmelia